WASHINGTON -- Sales of newly constructed homes plummeted an historic 40.7 percent in December 2007 when compared with the same month the year before--the largest year-over-year drop since September 1981, when the equivalent decline was 43.3 percent.
On a monthly basis, December’s sales, which amounted to 604,000 units at an annual rate, dropped 4.7 percent, and that was after sales had fallen 12.6 percent in November, according to the U.S. Commerce Department, which released the information this morning.
The severity of the drop reinforces the downward spiral of housing today, which is reverberating in global stock markets and the U.S. economy in general. Today’s data comes on the heels of a similar, if somewhat less intense, report from the National Association of Realtors, which reported that sales of previously owned homes fell 22 percent on a year over year basis, and 2 percent monthly.
The median price of new homes, at $219,000 was also down notably from the $245,900 in November. That is a 10.8 percent drop, and a 10.4 percent decline over the year.